8-K: American Express Discloses Delinquency and Write-Off Rates for U.S. Consumer and Small Business Card Loans

American Express has released delinquency and write-off statistics for its U.S. Consumer and Small Business Card Member lending portfolios for the first three months of 2024, showing a consistent trend in delinquency rates and a slight fluctuation in write-off rates.

Summary

• American Express has provided delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member loan portfolios for January, February, and March 2024.
• For U.S. Consumer Card Member loans, total loans were $82.3 billion as of March 31, 2024, with a 30-day past due rate of 1.4% and a net write-off rate of 2.3%.
• U.S. Small Business Card Member loans totaled $27.6 billion as of March 31, 2024, with a 30-day past due rate of 1.5% and a net write-off rate of 2.3%.
• The combined total of U.S. Consumer and U.S. Small Business Card Member loans was $109.9 billion as of March 31, 2024.
• The net write-off rate is based on principal only, excluding interest and fees.
• The report also includes data for the American Express Credit Account Master Trust, which has different characteristics than the total loan portfolios.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive as the results are within expected ranges, but there are some minor increases in write-off rates that warrant monitoring.

Positives

• The 30-day past due rates for both U.S. Consumer and Small Business loans remained relatively stable across the three months.
• The net write-off rates for both U.S. Consumer and Small Business loans were consistent at 2.3% for the three months ended March 31, 2024.

Negatives

• The net write-off rates for both U.S. Consumer and Small Business loans are at 2.3% for the three months ended March 31, 2024, which is higher than the 2.1% rate in January 2024.

Risks

• The report highlights that the credit performance of the Lending Trust may differ from the total loan portfolios due to differences in loan characteristics and calculation methods.
• Fluctuations in write-off rates could indicate potential credit quality issues.

Industry Context

This report provides insight into the credit health of American Express's lending portfolio, which is a key indicator of the company's financial stability and performance in the credit card industry. The data is important for investors to assess the risk associated with American Express's loan portfolio.

Comparison to Industry Standards

• Comparing American Express's delinquency and write-off rates to those of competitors like Visa and Mastercard, which also have significant lending portfolios, would provide a more comprehensive view of its performance.
• For example, Discover Financial Services, which is more directly comparable as a lender, would be a good benchmark for comparison.
• Industry benchmarks for credit card delinquency and write-off rates vary depending on economic conditions and the specific customer base, so a detailed comparison would require further analysis.

Stakeholder Impact

• Shareholders will use this data to assess the credit risk associated with American Express's loan portfolio.
• Creditors will monitor these metrics to evaluate the company's ability to repay its debts.
• Customers may be indirectly affected by changes in credit policies based on these trends.

Key Dates

Keywords

delinquency rates, write-off rates, credit performance, consumer loans, small business loans, American Express, lending portfolio